Creating a Great Business Plan
Imagine if you were travelling on a flight overseas and you asked the Captain, ‘Can I see the flight plan for the trip?’ and the Captain replied with ‘We don’t have one, we are just going to take off and hope for the best.’ Would you still want to take the flight?
The same concept applies to business, if you are trying to run your business without a business plan it’s like taking off in a plane without a flight plan. It’s the epitome of pin the tail on the donkey.
So, if you don’t have a business plan in place already, how do you go about putting one together to implement into your business? Here are 7 steps to work through when creating your business plan.
1. Be Clear on your Purpose, your ‘Why’
The first thing to be clear on is the purpose of the business, what is your ‘Why’. If the purpose of your business is only to put more money in your own pocket, it is highly likely that the longevity of your business will be very limited. If you look at some of the great companies over the world that are clear on their ‘Why’, they make a huge difference within their company and make a greater contribution to the wider community.
2. Set Some Goals
Setting goals is the next stage of formulating your business plan. These could be 90-day goals, 1-year goals or even 5 years. For those starting out with their business plan, it is important not to go too far out with goals, the further away the goals are, the harder it is to see how to get there. If you are starting out, try to keep your goals under 12 months.
3. Macro Analysis - SWOT & PESTE
Looking at the Macro environment surrounding your business is the next very important step in creating your business plan. The first step in your Macro analysis is to conduct a SWOT analysis on your business, reviewing the internal Strengths and Weaknesses and then the external Opportunities and Threats.
The next step is to conduct a PESTE analysis on your business. This will analyse the Political, Economic, Social, Technological and Environmental trends that impact your business, location and industry.
4. Micro Analysis - Profit & Leverage Strategies
Once the Macro analysis is complete, the next step is to conduct a Micro analysis on your business. This will analyse your business at the ground level and ensure the strategies you have in place, align with the goals outlined back at the start of the plan.
The first aspect of this is listing the Profit strategies that you will be implementing through your business. The important thing to note on profit strategies is that they can not all be implemented at once, so this needs to be critically thought out, planned and timed accordingly across the span of 6, 12 or 24 months.
The same needs to be done for the Leverage strategies that are to be implemented into the business. This is where strategies around Team, Culture, Systems and Technology come into play to create more time for the business owner to work on the business rather than in the business.
This section is where you break down the goals you have outlined at the beginning of your business plan into monthly or quarterly milestones to measure progress along the way. This is crucial to ensure you, your team and your business are tracking in line and at the right velocity to achieve your goals. Part of this process also includes aligning a budget and planning this out across the time frame you have allocated for each milestone and major goal.
6. KPIs & Critical Drivers
Along the way, anyone who works in the business, including the business owner and the team are going to need KPIs (Key Performance Indicators) and the Critical Drivers that are going to drive those KPIs into fruition. These are both needed across all areas of the business from Sales to Human Resources and everything in between.
7. Organisational Chart
For everything already mentioned to be actioned, you need to know what your organisational chart is going to look like. This could be very simple if you are a small business, or complex if you are a larger business. The main purpose for doing this is to identify what people you need internally, what elements do you need to outsource or subcontract so that you can have leverage in your business to execute the strategies you have put in place throughout your business plan.
Remember, pin the tail on the donkey will only work for a small amount of time. All great businesses have a great plan, so get yours started today.